In Bruce Steinberg’s March employment report, the ongoing affects of COVID-19 but reminds the reader that much of the data used to put the report together comes with it’s own set of issues:
“Although the novel coronavirus first appeared in December 2019 (the World Health Organization didn’t officially name it COVID-19 until mid-February), the first case confirmed in the United States was on January 20 or 21, 2020, and the first case of suspected local transmission occurred more than a month later at the end of February. The number of U.S. infections breached 100 on March 4, topped 1,000 cases on March 11, surpassed 10,000 by March 19, exceeded 60,000 by March 25, 160,000 on March 30, and about 240,000 by April 2.
On March 14, which is also the same week data are collected for the two surveys that are used for the monthly employment situation and from one of which the official unemployment rate is calculated, there were less than 3,000 COVID-19 cases in the United States.
As the two charts here show, the wholesale filings for unemployment insurance did not start until the next week. Therefore, the U.S. Bureau of Labor Statistics monthly employment situation for the month of March does not properly reflect the layoffs / furloughs that employers started in earnest in the second half of the month.
Instead of using the seasonally adjusted data as most media outlets report, we chose to use the raw, not seasonality adjusted numbers to show actual activity and not statistically derived numbers. Also, although self-employed and gig workers may be now eligible for unemployment benefits, they are likely are not included in the current claims counts at this time and may not qualify if they don’t have the proper work and pay documentation. At this time the guidance from the Labor Department about the kinds of acceptable documentation, and states? interpretation of that guidance — are the biggest unknowns.
These two charts track the same time periods, but in order to see what the ‘normal’ trend was before the number of filings jumped for the week ending March 21, a different scale was required for the number of initial claims for the previous week of March 14. These two charts track the same time periods, but in order to see what the ‘normal’ trend was before the number of filings jumped for the week ending March 21 and again for the week ending March 28, a different scale was required for the number of initial claims for the week of March 14. To reiterate, these charts to NOT show cumulative data, but the raw number of initial unemployment insurance claims for the indicated weeks.
We are not going to even venture a guess as to when — and by what magnitude — lost jobs return. However, to paraphrase James Carville’s from 1992 of what now has become a political cliche?” It’s the economy, stupid,” the return of the jobs, “It’s a public health issue, everyone.”
Be safe, be careful, be mindful — and above all — be kind and compassionate.”
The March employment report has detailed updates on job trends in all sectors. Send it to your staffing colleagues to keep your team up to date:
March 2020 Employment Report
As written by Bruce Steinberg:
Although the unemployment rate only jumped to 4.4 percent in March from February’s 3.5 percent, that’s because the data used to calculate the data are from the second week in March, which was just as COVID-19 started to significantly impact the economy (see our opening analysis above). Obviously, the number of employed persons, declined, the number of unemployed persons increased and the labor force contracted … see the Household Survey section below for many more details and explanations.
The total number of jobs fell off the cliff and declined by 701,000 in March and that figure is will be worse with the next employment report because of the timing of the survey used to calculate the data; it really is not useful to report what happen a year ago in March 2019, but in case you were wondering, it was up 147,000.
Overall private-sector hourly wages were up 0.39 percent in March, or 11 cents, from February and up 3.1 percent, or 86 cents, from March 2020; it will be interesting to see how the COVID-19 temporary wage boosts will be reflected in these data, but we won’t see that until next month’s report.
And Temporary help services also fell off the cliff in March and lost market share. But it has been worse.
And now more bad news, but it could be worse and will be next month when April’s employment situation is published on May 8 (note, that’s the second Friday of the month). Private-sector jobs were down 713,000 jobs in March, and in case anyone is wondering, they were up 242,000 in February.
The private Goods-producing sector was down 54,000 in March but to compared to February’s growth of 57,000 would be misleading.
- Manufacturing reversed direction and was down 18,000 in March, up 13,000 in February and was down 3,000 in March 2019
- Things started to come apart in the Construction sector with a decline of 29,000 jobs after adding 41,000 in February; it added 20,000 jobs in March 2019.
- Mining and logging was down 7,000 in March after adding 3,000 jobs in January; a year ago in March 2019, it was flat.
The private Service-providing sector took a big hit — which time may prove to be minor when the April employment situation comes out in May — with a loss of 659,000 jobs in March; in February it added 185,000.
- The Retail trade sector shrank by 46,200 jobs in March after it added only 1,200 in February.
- The Wholesale trade sector held its own in March with a marginal increase of 900 jobs after declining by 1,900 in February.
- But the Transportation and warehousing sector stayed in reverse with a loss of 4,900 in March after removing 1,200 jobs in February.
- Financial activities was down with a loss of only 1,000 jobs in March; in February it added 31,000 jobs.
- The Professional and business services sector experienced a decline of 52,000 jobs in March; in February it added 36,000. Computer systems design and related services bucked the trend and added 3,800 in March as well as Management and technical consulting services that was up 2,000. But Architectural and engineering services was marginally down by 800 jobs.
- The Education and health services sector was down by 76,000 jobs in March with the losses in many health care and social assistance sub-sectors. Hiring in home health care services dropped by 5,900 in March and experts expect the losses to continue and accelerate in April.
- As expected, the Leisure and hospitality sector lost 459,000 jobs in a sector that had almost 16,400,000 jobs in March and the decline is expected to be greater in April.
The total number of Government jobs was up 12,000 in March. The federal government added 18,000, which includes 17,000 workers brought onboard for the 2020 Census, state government down 14,000, and local government added 8,000.
Temporary Help Services Roundup
The number of Temporary Help Services jobs in March was 2,892,700 which was a decline of 49,500 jobs from the previous month, or 1.68 percent. BTW, the sequential decline in the total number of non-farm jobs was 0.46 percent.
However, this was not the largest decline ever for THS by far. In October 2008, it lost 74,700; November 2008, it was down 104,100; and down 76,600 jobs in December 2008. And the losses continued into 2009 with January 2009’s decrease of 83,500; February 2009 was down 68,700; March 2009 was down 62,500; April 2009 was off 57,700; but by May 2009, it lost only 4,400 jobs.
For a chart of temporary help’s growth from January 1991 to March 2020 and comparing its trend to total employment, click here. As seen in that chart, this sector’s zenith was in early 2018.
In March 2020, temporary help services continued to lose market share of all jobs to 1.9058 percent and is still well below a year ago in March 2019, when it was 1.9638 percent, and two years ago in March 2018, when it was 2.0169 percent.
The accuracy of the unemployment rate is questionable. As per the U.S. Bureau Labor Statistics, “The household survey is generally collected through in-person and telephone interviews, but personal interviews were suspended during the collection period for the safety of interviewers and respondents. The household survey response rate … was about 10 percentage points lower than in recent months.” So that information, coupled with the reference week being the second week of the month, an unemployment rate of only 4.4 percent for March was highly likely lower in reality.
The number of employed persons declined by 2,987,000 as the number of unemployed persons increased by 1,353,000 but the size of the entire labor force contracted by 1,633,000. And there were 1,753,000 more people considered as not in the labor force in March.
The labor force participation rate was declined 0.7 to 62.7 percent in March and the employment-to-population ratio was down 1.1 to 60.0 percent; these data rarely change more than 0.1 on a month-over-month basis.